13
།།།། mmimmim
PUBLIC RECORD OFFICE
Reference :-
CO. 882
9
PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO
These remittances should be held in as liquid a form as possible. so as to meet any demands from here under Section 12 of the Ordinance mentionel
Remittances already made for investments, viz, redemption of securities
pledged to Loan Account :
September 30th £10,000 Hong Kong and Shanghai Bank
£10,000 Chartered Bank of India, Australia. September 30th
and China
13) Remittances arranged for through the Chartered Bank of India, Aus
tralia, and China:
October 31st -£10,000
November 30th- -£10,000
Through the Banque de l'Indo Chine
November 30th -£10,000
B General Account of the Colony
Remittances arranged for on account of the Colony's General Account through
the Hong Kong and Shanghai Banking Corporation:
October 15th--£10,000
October 22nd-£10,000 October 29th- -£10,000.
I have, &c.
ARTHUR YOUNG,
Colonial Secretary, Straits Settlements
The Crown Agents for the Colonies,
Whitehall Gardens,
London, SW
36350
SIR,
No. 22
COLONIAL OFFICE to TREASURY.
[Copy to Crown Agents, November 13, 1909. L.F} [Answered by No. 23.]
Downing Street, 12 November, 1909. Wrru reference to your letter of the 28th of July,* on the subject of Straits Settlements currency, I am directed by the Earl of Crewe to transmit to you, to be laid before the Lords Commissioners of the Treasury, a copy of correspondencet with the Crown Agents for the Colonies, regarding remittances received by them on account of the note issue at Singapore.
His Lordship understands from what passed at the Conference at this Office of the 8th of June that their Lordships are not likely to object to the gold received by the Crown Agents being lent out at call, but he is advised that Section 11 of Ordinance XXVII. of 1908, which provides that the gold "may be kept in London in the custody of the Crown Agents," will require amendment before this course can legally be taken.
Lord Crewe proposes to telegraph to the Governor accordingly, if their Lordships concur, and to add that the amending Ordinance should provide that the profit on gold so lent out at call should be paid to the Gold Standard Reserve Fund. The coin portion of the note issue reserve fund will be paid only the "equivalent in sovereigns" of the currency issued at Singapore.
I am to request the favour of a reply to this letter at the earliest possible moment.
I am,
&c..
H. BERTRAM COX
37431
SIR.
No. 23
TREASURY to COLONIAL OFFICE.
(Received November 16, 1909.1
[Answered by L.F, transmitting coques of Nos. 24. 25 and 26.1
Treasury Chambers, 15th November, 1909. 1 am directed by the Lords Commissioners of His Majesty's Treasury to a knowledge the receipt of Mr Bertram Cox's letter of the 12th instant (36350' 1909. having reference to the way in which gold coin received by the Crown Agents for the Colonies against Government notes issued at Singapore should be dealt with In reply, I am to request you to inform the Earl of Crewe that, while it is perfectly true that the arrangement contemplated by the Treasury letter of The 25th July last would work quite effectively without accumulation of an actual specie reserve in London, this result could only be attained at the expense of the general gold reserve of the United Kingdom. which is, in the opinion of many persons amongst those who are most competent to judge, already far from adequate
the commercial needs of the country
It must be remembered that the withdrawals of gold from the reserve in London which will arise at times when the balance of trade is such as to require an export of currency from the Straits Settlements towards meeting foreign indebted- ness will be made to meet Straits Settlements obligations not only to the United Kingdom, but to other countries as well, and that in so far as they are made for the latter purpose they will affect the actual movements of specie as between London and other commercial centres.
It is, of course, improbable that, for the present, at any rate, the transactions on account of the Straits Settlements Government will be sufficiently considerable to exercise any appreciable influence on the general gold reserve of the United Kingdom, but on the other hand, it appears to my Lords desirable, in view of the present state of commercial feeling on the subject, that recognition should be given to the principle that a Colonial Government adopting for its own convenience an arrangement which depends for its effective working on the free market for gold existing in London ought to do something at any rate towards maintaining the actual reserve of specie on which that free market depends.
In these circumstances, it seems to their Lordships desirable that the working balance at any rate of the Gold Standard Reserve Fund should be held by the Crown Agents for the Colonies in actual specie, and not in the form either of bankers' money or of cash at call.
On the other hand, there is, in their Lordships' opinion, no necessity that the whole of the gold deposited with the Crown Agents for the Colonies against notes in circulation in Singapore should be so held.
My Lords have, therefore, no objection to power being taken by an amendment of the Ordinance to enable the Crown Agents to invest such moneys up to an amount not exceeding one-half of the total for the time being in their hands They think, however, that the power of investment should be of a general character, and that it need not be limited to lending money out at call, since, under the arrangements they suggest, the payments out against telegraphic transfers will, so far as the gold coin in the hands of the Crown Agents permits, be made in specie, and the balance of the fund will probably remain undisturbed for lengthy periods.
In order. however, to be prepared for emergencies, a moderate amount of these funds should be held in the form of cash at call or on short loan, and the Crown Agents should be given power to borrow temporarily against the securities held, in lieu of realising them, whenever that course appears to be desirable. Any interest earned by these funds should, as Lord Crewe suggests, be carried to the credit of the Gold Standard Reserve Fund, "the equivalent in sovereigns" of the notes issued by the Currency Commissioners only being paid into the Note Issue Reserve Fund. Similarly any interest charge incurred in respect of temporary borrowings against the securities, if the above suggestion is adopted, should be debited to the Gold Standard Reserve Fund.
I am. &c..
G. H. MURRAY.
• No. 10.
↑ Nos. 16, 18, and 21.
• No. 22.
↑ Xo. 10.
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